Posted in Energy, Nuclear, tagged bailout, call in day, congressional budget office, federal financing bank, Loan Guarantees, Nuclear, obama, Public Citizen, reactors on February 25, 2010 |
Original post can be found at our DC “Citizen Energy” blog
President Obama wants to triple the loan program for construction of new nuclear reactors, to $54 billion.
The nuclear loan guarantee program commits taxpayers to not only underwrite risky nuclear reactor projects, but also allows wealthy nuclear utilities to borrow the money from the government’s Federal Financing Bank- funds for this bank come directly from the U.S Treasury. You might want to read that again.
If you are struggling with the absurdity of a program that allows taxpayer dollars to both guarantee and provide direct loans for billion dollar projects that the Congressional Budget Office has found will default 50% of the time, you are not alone.
On February 25th, Public Citizen and several ally organizations are calling on their members to tell Congress to stop the tripling of the nuclear loan program. The proposal to expand this ill-conceived program is not a done deal. So, please join us to stop this boondoggle. You can reach all of your Congress members at 202-224-3121.
By promoting cleaner energy, cleaner government, and cleaner air for all Texans, we hope to provide for a healthy place to live and prosper. We are Public Citizen Texas.
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Call it a preemptive bailout if you like, my Friends…
…but the Department of Energy recently issued a press release stating that they have received 19 applications for federal loan guarantees to build 14 nuclear power plants. The price tag: $122 billion.
I know after the $700 billion bailout package, on top of $100+ billion just for AIG, $122 billion for nukes doesn’t sound that impressive. But it is a little scary when you realize that the feds only appropriated $18.5 billion for loan guarantees. Now children, don’t push in line!
The DoE estimated the total cost to construct the 21 proposed reactors at $188 billion, which they say averages out to around $9 billion per reactor.
Taxpayer-backed loan guarantees would total $5.8 billion per reactor based on DoE’s numbers. That’s a hard pill to swallow for an industry with a notorious history of default. From Bloomberg:
Taxpayers are on the hook only if borrowers default. A 2003 Congressional Budget Office report said the default rate on nuclear construction debts might be as high as 50 percent, in part because of the projects’ high costs.
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Make no mistake about it, we face an economic crisis of enormous proportions. But the rush to bail out Wall Street firms with a “hair on fire” urgency rings so hollow when you consider how much the American people have already gone through. Millions of people have lost their homes to foreclosures. Many are being forced onto the streets, as tent cities are popping up in major cities. But nothing happened to fix the sub-prime mess, brewing for two years now, until Wall Street had a cash-flow problem.
The biggest problem seems to be that the government is now moving, not because they are inclined to make public policy for the good of the American people, but because their campaign donors have asked them to. You can see campaign finance’s fingers in the presidential race as well, as Wall Street donors dominate the upper echelons of each candidates’ major fundraisers and both candidates flounder and walk the thin line between offending their donors and offering real leadership.
As a seeming palliative to the financial crisis, the House introduced yesterday HR 7022, the Fair Elections Now Act, “To reform the financing of House elections, and for other purposes.” This bill would provide full optional public financing for congressional elections. It’s companion bill in the Senate has been mired in Congressional inaction. We can see how quickly Congress can act when it (more…)
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